Derivatives - Applications and Settlement Process
This programme is now available only on in-company basis. If you have a group of 3 or more we can deliver it in any location worldwide. Contact us to find out more.
Check here the list of our upcoming open public courses.
This practical 2 day course gives a detailed coverage of the major types of derivatives and how they are valued and traded. Delegates will also have a chance to learn about the process of margining and central clearing of derivatives which is broadly discussed at the moment by the industry and regulatory bodies.
The course is suitable for professionals who have some knowledge of derivatives but would benefit from a broader understanding of these instruments and how they are settled for margining purposes.
What Will You Learn
By the end of the course delegates will:
Main Topics Covered During This Training
Who Should Attend
From Banks, Fund Management, Exchanges and Clearing Houses:
Derivatives Applications and Settlement - A 2 Day Programme
- Definition and history of derivatives
- Who are the main users of derivatives and why?
- Where are derivatives traded? – OTC v exchanges
- What is the role of the clearing house?
- Why are derivatives marked to market?
- Defining a futures v a forward contract key terminology contract specifications
- Basic pricing theory cost of carry relationship basis, and carry return arbitrage and futures/forward prices
- Main types of futures/forwards bonds, stir, equity, commodities, currencies FRA’s and swaps calculating the tick value
- Basic hedge ratio adjusting the hedge ratio
- Spread trading strategies intra and inter contract spreads
- How do you work out profit and loss?
- Defining an option call/put obligations and rights
- terminology explained
- Types of options options on futures and the underlying product OTC v exchange options, warrants and covered warrants, convertibles
- Basic option pricing time value and intrinsic value overview of the Greeks
- Users and uses versus futures profit loss profiles at expiry
- Popular hedging and trading strategies portfolio protection and enhancement combining positions
- Day in the life of a trade
- Operations of the CH
- Clearing and non clearing members
- Treasury operations and risk management
- Guarantees and netting
- Types of accounts
- Collateral, delivery and exercise
- Variation margin on futures
- Variation margin on options based on futures
- Equity net liquidation value
- Portfolio based systems for initial margin - SPAN
- Inter month charge, credits
- Defining a swap
- terminology explained
- Interest rate swaps, fixed v floating
- Uses and applications of swaps managing interest rate exposure arbitrage using swaps
- How do you price a swap? creating a zero spot curve using STIR futures
- Pricing an asset swap relationship between repos and swaps
- Currency swaps and equity swaps uses and applications
- Credit Default Swaps and Total Return Swaps use of CDS in structured credit products CDOs – CMO, CBO, CLO
- Recent developments in CDS market
- Who use derivatives? Corporations, funds, banks, market makers, dealers
- How are derivatives used in fund management? Asset allocation, basic portfolio protection and enhancement hedge fund uses of derivatives
- Derivatives in treasury operations managing interest rate and currency risk
- Using derivatives to trade spreads intra and inter contract spreads
- How are derivatives used in structured products?
- Option trading strategies common spreads
Paul has over 20 years experience of working and teaching in the financial and derivatives industry. Paul joined the London International Financial Futures and Options Exchange (LIFFE) in 1988, spending several years on the exchange trading floor before transferring to LIFFE’s Business Development Department.
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